Partha Krishnamurthy, University of Houston at Texas, USADemetra Andrews, University of Houston, USAAnu Sivaraman, University of Delaware, USA

According to the inaction inertia literature, the discrepancy between the missed and current opportunity induces counterfactual thinking which produces regret. As the attractiveness of the missed opportunity increases, the level of regret increases, thus reducing the likelihood of accepting the inferior opportunity. In this research we argue that this conclusion may be misleading because counterfactual thinking not only induces regret, it also helps prepare for future behavior. This suggests that as the attractiveness of the missed opportunity increases, the impetus to change course increases resulting in action rather than continued inaction. In two studies, we find that inaction leads to hyper-action when the decision-makers’ past choices are facilitative of corrective functional counterfactuals.